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RBI Updates 1% Interest Subvention Scheme for Housing Loans

Introduction

This communication from the Reserve Bank of India (RBI) pertains to the guidelines for a 1% interest subvention scheme on housing loans.

Key Updates on the Interest Subvention Scheme

The circular RPCD.SME & NFS.BC. No. 62/06.11.01/2010-11, dated April 21, 2011, outlines significant changes regarding this scheme:

  1. Expansion of Loan Limits:

    • Previously, the interest subvention applied to housing loans up to Rs. 10 lakh.
    • As proposed in the Union Budget Speech of 2011-12, this will now extend to housing loans of up to Rs. 15 lakh, provided the total cost of the house does not exceed Rs. 25 lakh.

  2. Immediate Implementation Required:

    • All Scheduled Commercial Banks (excluding Regional Rural Banks) are instructed to disseminate this update to all Controlling Offices and Branch Offices to ensure prompt implementation of these guidelines.

  3. Terms and Conditions:

    • It is important to note that all other terms and conditions of the housing subvention scheme remain unchanged.

Conclusion

Banks are required to acknowledge receipt of this communication and take necessary actions to comply with the revised scheme guidelines. The aim of these updates is to make housing loans more accessible while maintaining the integrity of the current subvention mechanism.